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The revamped District agency, which fired nearly two-thirds of its staff last year, is targeting new customers with trendy games and Internet contests.

The D.C. Lottery, now made up of more tech-savvy employees, created a restructuring program to improve the agency’s revenue, which in part goes to the fund that pays for D.C. programs such as school building improvements.

“What we were trying to do is put the agency in a better position to adapt to the marketplace, the changing demographic of our players and changing player interest,” said Jeffrey Young, chief operating officer of D.C. Lottery.

Though the D.C. Lottery and Charitable Games Control Board was posting record revenue of $241 million in fiscal year 2004, its revenue to the District was down to $73 million. In the mid-1990s and as recently as 2001, the lottery annually earned about $80 million for the District.

The agency’s goal for revenue to the District in 2006 is $73 million, compared with the estimated revenue of $71 million to $73 million in fiscal year 2005, which ended Sept. 30.

The D.C. Lottery now is using more trendy Texas Hold ‘Em and Internet-related games to target customers who aren’t interested in scratching off plain old tickets like their grandparents did.

The 23-year-old D.C. Lottery, as well as other lotteries, are faced with dwindling interest from consumers. Lottery audiences today don’t blink at a $1 million jackpot — a prize that would have drawn crowds when Lotto games began in the early 1980s, said David Gale, executive director of the North American Association of State and Provincial Lotteries (NASPL) nonprofit trade group in Willoughby Hills, Ohio.

“The longer the game is in the marketplace, the greater those jackpots have to be to attract those crowds,” Mr. Gale said.

Lotteries also are competing with online gaming sites, riverboat casinos and Indian gaming casinos that have spread to most metropolitan areas within the past seven years, Mr. Gale said.

To combat the growing competition, in August 2004, the D.C. Lottery told its 100 employees — more than 60 percent of whom had been there more than 15 years — they had to reapply for their jobs, whether in customer service, marketing, information technology, finance or new-product development, said D.C. Lottery Executive Director Jeanette A. Michael.

The agency cut 23 positions and rehired only 35 percent of the existing employees.

“We were able to start from scratch, blow up the operation and start a structure that’s best for the future, using different skill sets,” Ms. Michael said.

The agency also is planning to make lottery tickets available in new places, such as bars and restaurants.

“Playing the lottery is an impulse buy — the more venues we’re able to identify, the more players we’re able to get,” Ms. Michael said.

The agency is changing the way it spends its $5 million advertising budget with advertisements at concerts and outdoor venues and participation in promotions with retailers.

The D.C. Lottery has come a long way from the mid-1990s when allegations of cronyism and financial problems plagued the D.C. Lottery and Charitable Games Control Board, which was responsible for overseeing the lottery. Among its critics was current Mayor Anthony A. Williams, who was the city’s chief financial officer at the time.

D.C. Lottery officials say it’s a bit early to measure whether the restructuring was successful, but the agency is bringing products to the market more quickly and recently won industry awards.

Last month, the agency won a best-special-event-promotion-of-the-year award from the NASPL for its $5 Negro League Baseball instant scratch tickets, which featured photos of four Negro League teams.

The February kickoff event included a Union Station autograph signing by John Jordan “Buck” O’Neil, a Negro League All-Star. The D.C. Lottery also sponsored the Negro Leagues Baseball Museum’s traveling exhibit.

The Negro League ticket went from idea to kickoff in less than six months, significant progress from the D.C. Lottery’s typical 12-month time frame, said spokesman Bob Hainey. It was one of the D.C. Lottery’s first multidimensional campaigns since spring 1999.